LUBBOCK, Texas (RFD News) — Cotton prices have rallied after hedge funds shifted from a net short position to a net long position in ICE cotton futures.
Texas A&M AgriLife Extension Cotton Economist John Robinson says the speculative move coincided with roughly a 20-cent increase in nearby cotton futures.
Robinson says hedge funds had remained net short on cotton for nearly two years, a trend that aligned with relatively low and flat nearby ICE cotton settlements before shifting in April 2026.
He says the rally likely began with traders buying to cover existing short positions before expanding into additional long buying activity.
Robinson adds that speculative trading can sometimes move prices faster than underlying crop fundamentals alone would justify.
Despite the recent rally, the broader cotton outlook remains relatively neutral. Robinson says projected 2026/27 ending stocks remain within 500,000 bales of the current 2025/26 estimate.
Moving forward, Robinson says weather conditions could become the next major driver for the cotton market, with early dryness and possible El Niño moisture patterns influencing crop expectations and price risk.
